Oil: The writing was on the wall – ANZ

Crude oil prices tumbled, as weak demand threatened to overwhelm storage facilities, per ANZ Bank.

Key quotes

“The WTI May futures contract is due to expire on Tuesday, forcing any holders of that contract to accept physical delivery. With storage facilities filling up fast, particularly at the WTI pricing point, Cushing, there are fears that there will be nowhere to store it. Thus, the contract closed the day in negative territory.”

“Producers are beginning to set themselves for the new quotas. Russia’s Energy Minister Alexander Novak ordered producers to cut output by about a fifth to comply with the agreement.” 

“In the US, the number of drilling rigs continues to fall, which should see US shale output start to fall in coming months.”